Citizens for Principled Government

PART I

Add the college student loan program to Washington’s latest takeover of private enterprise. In yet another government “makeover” or “change” that is supposed to give new “hope” to America, the runaway train engineered by Obama, Reid and Pelosi (all liberal democrats) has again through congressional slight of hand found a way to pass radical “reform” legislation. This is again done without debate or prior committee review and input to screen and protect against such abuse of power.

Remember the wit and wisdom of Ronald Reagan who said, “The scariest words in the English language are, ‘Hello, I’m from the government and I am here to help you.” For decades, the Federal student loan program has respected the role of private banks and other financial institutions in making low interest loans with deferred repayment schedules to help young people finance a college education and improve their station in life. The government’s only role in these “student loans” has been to provide back up in the form of guarantees. Lenders are then willing to make such loans and apply a relaxed set of qualifications for those who are just getting started on their chosen career path.

Until Obama and the current Democrat majority in Congress took over, more than 2000 private companies made student loans. Now, the Federal government has completely taken over that program. Loan applicants must now contact and work exclusively through four government “call centers”. The Feds were previously just the guarantor of the loan and not the source of the funds. No government money was needed or spent unless there is a default. However, under Obama, government just got bigger and free enterprise and individual freedom took the hit. In the midst of double-digit unemployment, more than 30,000 jobs will be lost under this latest government takeover. Why would our government be a competitor and an obstacle to free enterprise? Why must capitalism yield to the creeping tide of socialism that seems to go unchallenged today in our nation’s Capitol?

Peter Hannaford (who was closely associated with President Ronald Reagan for a number of years) has called this latest government takeover — “Chapter 3”. This comes after the $760 billion “stimulus” and the trillion dollar healthcare “reform” elements of the Barrack Obama strategy to create an ever expanding class of Americans who are dependent upon their government. This time, President Obama has taken the 15 million college students who were free to go to one of 2000 different lenders for their loans and dumped them into the Federal Department of Education (which was a Jimmy Carter creation and is long overdue for reconsideration).

Private lenders, banks and some non-profit organizations previously competed for student loans and handled all the details of the loans they wrote. They receive service fees from the Government but Obama now calls these “subsidies.” He claims that eliminating this process will result in “savings”. Since when does the Government save us money by taking something from the private sector?

The Federal Department of Education will now borrow student loan money at 2.8% interest and charge the students 6.8%. The difference between those two interest rates is the new “profit” or “savings” the Federal Government claims they will achieve but that amount is “earmarked” for Obama’s budget busting healthcare reform plan. It seems the enormous deficit they have created is now pushing them to go into the lending business (with our tax dollars). They must find new ways to make money to offset their losses elsewhere. This is hardly the proper role of government.

Senator LaMar Alexander of Tennessee (a former U.S. Secretary of Education) tried to lower the interest rate and amount of profit that the Government is about to generate by going directly into the student loan business. He points out that the Government takeover in this area will “deprive 15 million students of choices, add half a trillion dollars to the Federal debt and throw out of work 31,000 Americans who currently help students with loans”. Human Events commentators have written: “Again we see that Obama’s background is completely void of prior experience in the private sector. He does not understand it and, therefore, mistrusts it and is quick to dismiss it. What reasonable minds would clearly see as a ‘takeover’, Obama continually calls ‘reform.’ The ‘winner’ in all of this is the Department of Education bureaucracy and the public employees union that supports its expansion.”

How did this legislation pass? Obama and his allies in Congress attached the Bill to the unrelated “healthcare reform” legislation that they managed to cram through just before the Senate election in Massachusetts took away their super majority. (A prior article on this site showed how the President advanced his “gay rights” expansion agenda by attaching his sexual orientation/ “hate crimes” legislation to the military budget where it would escape debate and could not be separately rejected). This time, he and his allies threw the student loan takeover into his healthcare reform legislation. These days, anytime there is a piece of liberal legislation steamrolling through Congress, the Democrat majority in Washington is able to throw in any controversial item they don’t want to see separately debated, discussed and voted upon.

PART II

TO CUT THE SIZE AND COST OF THE FEDERAL GOVERNMENT, WE NEED TO
RE-EVALUATE THE U.S. DEPARTMENT OF EDUCATION AND RETURN THE MONEY AND CONTROL BACK TO THE STATES

Regarding the Federal Department of Education in general, it is well to note how that Department came into existence and the continuing controversy surrounding its operations.

President Jimmy Carter exceeded constitutional authority and expanded the Federal government by creating the Federal Department of Education. The Department’s original budget was $13.1 billion (in current dollars) and employed 450 people. By 2000, it increased to $34.1 billion and by 2007 it doubled and grew to more than $73 billion. The budget request for fiscal year 2011 is $77.8 billion. The Department now employs 4800 people. And yet, all of this spending over 30 plus years has done very little to improve American education. Why? Because the Federal Government has no constitutional authority to involve itself in local public education including school curriculum and employment.

In Utah, the Federal government wrongfully asserts ownership and control of as much as 70% of our public lands. It thus deprives us of not only the full and free use of our land and natural resources but also the income and property tax revenue that would normally flow to our schools and state public education system. Ask yourself why Kentucky or Missouri or Ohio have experienced no such Federal land grab. Only in the West did our government (upon granting statehood) choose to simply keep and hold back some of the territory that our Constitution provides shall be turned over to the states. The West is a glaring unconstitutional irregularity.

Again and again, we see and feel the negative effects of overreaching Federal policies, programs and agencies. Ronald Reagan wisely and aptly identified the problem that now confronts us. He said,

“THE FEDERAL GOVERNMENT HAS TAKEN TOO MUCH TAX MONEY FROM THE PEOPLE, TOO MUCH AUTHORITY FROM THE STATES, AND TOO MUCH LIBERTY WITH THE CONSTITUTION.”

To be continued in part 3